Tauchmann H (2006)
Publication Language: English
Publication Type: Journal article
Publication year: 2006
Publisher: Elsevier
Book Volume: 34
Pages Range: 3898-3909
Journal Issue: 18
DOI: 10.1016/j.enpol.2005.09.014
This paper attempts to estimate how the fuel mix of German electricity producers does react to fuel price changes. The empirical analysis is based on panel data (1968-1998) of major utilities. Two different aspects of fuel choice are distinguished: at the one hand, the construction of usually fuel-specific capacities for electric power generation, i.e. investment decisions that determine the fuel mix in the long run; at the other, fuel use conditional on existing generation capacities, i.e. short-run inter-fuel substitution. According to the results from panel unit root tests, both the econometric models which describe these two aspects are specified in changes rather than levels. The partly discrete nature of investment decisions is taken into account, by constructing a discrete model of capacity adjustment. Our estimation results suggest that the fuel mix of electric utilities is price inelastic either if long-term investment or short-term inter-fuel substitution is considered. Finally, the empirical results are used to predict the potential impacts of CO
APA:
Tauchmann, H. (2006). Firing the Furnace? An Econometric Analysis of Utilities' Fuel Choice. Energy Policy, 34(18), 3898-3909. https://dx.doi.org/10.1016/j.enpol.2005.09.014
MLA:
Tauchmann, Harald. "Firing the Furnace? An Econometric Analysis of Utilities' Fuel Choice." Energy Policy 34.18 (2006): 3898-3909.
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